San Diego Unified First School District in California to Call for Pension Funds to Divest from Fossil Fuels

San Diego Unified School Board Members and Superintendent Cindy Marten at the July 26 meeting. (Source: SanDiego350)

By Anne Marie Tipton / SanDiego350.org

The San Diego Unified School District’s (SDUSD) Board of Education unanimously passed a resolution on July 26th calling on the California State Teachers’ Retirement System (STRS) and the California Public Employees’ Retirement System (PERS) to divest their investment portfolios of stocks in fossil fuel companies.

Recognizing the threat of global warming, the resolution also supports last year’s state legislation, SB 185, which requires PERS and STRS to divest from coal stocks. Most of SDUSD’s employees belong to these huge retirement systems.

SanDiego350 and other proponents believe that San Diego Unified is the first school district in California to pass such a resolution – joining the California Federation of Teachers, the Unified Teachers of Los Angeles, and other organizations who have publicly called on CalPERS and CalSTRS to divest from fossil fuel companies. San Diego Unified serves more than 130,000 students in pre-school through grade 12, has over 13,000 employees (including nearly 6,000 teachers), and is the second largest school district in California.

The resolution is a sign of growing momentum for fossil fuel divestment locally—only a couple of months ago the UC San Diego Academic Senate passed a similar resolution urging the UC Regents to divest the University of California’s investment portfolio of stocks in fossil fuel companies. The resolution recognizes the threat of global warming and UCSD’s pioneering contribution to climate science. It also acknowledges the risk to the UC endowment and pension funds from the prospect of falling fossil fuel stocks. The UC system also made the decision to divest from coal and tar sands in 2015, and earlier this July, CalSTRS voted unanimously to move $2.5 billion in assets to a low-carbon index fund.

The move isn’t only about transitioning from fossil fuels to clean energy to reduce carbon emissions—a report last year showed that PERS and STRS had lost $840M from coal stocks during the 2014-15 fiscal year, and $5.1B in fossil fuel stocks overall.

And the trend isn’t just local. In May, the University of Massachusetts system announced it will divest its endowment from direct holdings in fossil fuels, and in June the District of Columbia Retirement Board (the city of Washington’s largest public pension fund) announced it had quietly sold off all of its funds from fossil fuels investments over the past few years. Several major European cities, including Berlin, Paris, and Copenhagen, have also divested in the last few years.

Board member Kevin Beiser, who co-authored the resolution, said he is grateful that San Diego Unified has been a leader in sustainability. “Climate science tells us that we must act now to prevent future disasters,” he said. “And as teachers and staff who devote ourselves to improving the lives of students, we have a moral obligation to do everything in our power to protect them from the impacts of climate change.”

Joe Wainio, a fourth grade teacher at Horton Elementary school and a member of the Board of Directors of the teachers’ union San Diego Education Association* said he had concluded that divestment is the safer course financially, especially given the calculations of climate scientists (including prominent UC San Diego scientists) demonstrating that fossil fuel assets cannot be burned if catastrophic climate change is to be avoided. He said “I support divestment because coal, oil and gas stock prices have been plummeting, and have already lost PERS and STRS millions – and these investments will decline even more as we transition to clean energy.”

Divestment is big on social media! SanDiego350 meme that reached nearly 20,000 people, was shared over 130 times and liked over 1,000 times. (Source: SanDiego350)

SDUSD Board of Education member Richard Barrera said that it was important for the Board to show moral leadership. “There is a question of justice about divesting our retirement funds from fossil fuel companies: most greenhouse gases in the atmosphere have come from the wealthy people in the world, but the worst consequences — such as hurricanes, droughts, fires, flooding, famine and disease — will most severely impact the world’s poorest people. We have a moral duty to our fellow humans, as well as future generations, to act now while we still have a chance to avoid the worst consequences of climate change.”

Prof. Eric Halgren, who led the recent Fossil Free UCSD effort to bring the recent Academic Senate resolution to a successful faculty vote in May, and who is the father of two recent graduates of SDUSD schools, was encouraged. “We must build a global consensus behind becoming fossil free in the next 20 years if we want to avoid flooding major cities, massive famines, and mass extinctions. It was scientists at UCSD who discovered that fossil fuel burning is causing climate change and needs to end. This means that fossil fuel stocks are overpriced. I’m excited that the San Diego Unified School District is taking steps to protect its employees’ retirement investments and our children’s future.”

Divestment activists like those at SDUSD, UCSD, and Fossil Free California, a statewide campaign, are convinced that if we are going to tackle climate change, the reserves the top 200 fossil fuel companies are literally banking on need to stay in the ground. Climate change experts agree that if we want to have a chance at avoiding the most catastrophic climate effects including sea level rise, extreme weather events, increased fire frequency, and loss of agricultural production, 80 percent of fossil reserves must not be burned.

The strategy is that broad based divestment, and support for divestment from public pension funds and municipalities around the country, paves the way for ending fossil fuel subsidies and for government regulation of the fossil fuel industry to ensure reserves are kept in the ground .

While sale of stock might not have an immediate impact on a fossil fuel company’s bottom line, it does highlight growing uncertainty about the viability of the fossil fuel industry’s business model. The divestment movement is already generating public discussion, which adds momentum to legislation limiting carbon emissions. By divesting from fossil fuels now, folks are building the case for governments to act to keep fossil fuel reserves in the ground – while divestment activists and pension board members work to protect investors and pensioners from the consequences of the inevitable market collapse.

Divestment is not, primarily, an economic strategy. It’s a moral stand, an educational strategy and a public relations campaign. Just like in the struggle for civil rights in the U.S. or the fight to end apartheid in South Africa, the more people can make climate change a clearly moral issue, it is thought, the sooner society will act.

To quote 350.org co-founder Bill McKibben, “As long as we invest in the fossil fuel companies, we help prop up their political power. And as long as that political power remains, the response to climate change will always come too slowly—they’ll continue to make sure that we never get a price on carbon to reflect the damage it causes, and that every new technology will be stomped on as it’s trying to exit the cradle. The days of the fossil fuel companies are numbered, but the exact number is what counts; if they are able to drag out the clean energy transition for decades then the damage will be measured in geologic time.”
Or, as Kevin Beiser explained, “This divestment campaign is about helping people to realize that keeping carbon in the ground is both a moral imperative and makes good economic sense. I hope that CalPERS and CalSTRS take a leadership role in building the essential societal consensus for a fossil free future.”

* For identification purposes only, does not imply endorsement of organization.

Anne Marie Tipton graduated from San Diego State with a degree in Zoology and coursework towards a masters in Ecology. She has been the Education Coordinator at the Tijuana River National Estuarine Research Reserve for 13 years where she was fortunate to complete training as a climate change interpreter with the National Network of Ocean and Climate Change Interpreter. She was one of the founding members of Fossil Free California, the statewide campaign working on divesting our public pensions from fossil fuels and she serves on the Team Leader Council of SanDiego350

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The surest way to stop controversies about the investments in these underfunded pension plans is to end these defined benefits pension plans and put everyone in a defined contribution (401k or 403b) plan.

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